Electronics could make up 55% of vehicle costs by 2030
What's the story
A recent report by Boston Consulting Group (BCG) and the Automotive Component Manufacturers Association (ACMA) has predicted that electronics will account for 50-55% of a vehicle's cost by 2030. This is a major jump from the current share of around 30-35% in 2020. The trend presents an enormous opportunity for Indian auto component manufacturers to expand their operations into electronic components.
Industry shift
Growing electronics content in vehicles
The report highlights that vehicles, whether powered by internal combustion engines (ICE) or electricity, are becoming more electronic.
This is due to the growing prevalence of features like advanced driver assistance systems (ADAS), infotainment systems, sensors, and connectivity.
The rising electronics content is one of the structural changes reshaping the auto component industry.
Market gap
Opportunities for Indian suppliers
Despite the growing trend, India's electricals and electronics segment only accounted for some 12% of component supply in FY25.
This leaves a huge opportunity for domestic suppliers to build capabilities in this area.
The report highlights opportunities across sensors, electronic control units (ECUs), power electronics, ADAS, connectivity, and battery management systems (BMS) as rising electronics content creates new component value pools.
Growth potential
Localization opportunity for India
The report emphasizes that the shift toward more electronic vehicles presents a localization opportunity for India.
It highlights the potential for Indian suppliers to capture a larger share of the value generated by this shift.
The trend toward higher electronics content is part of broader structural changes that are increasing the value of components embedded in vehicles and opening up new areas of growth for the industry.
Industry evolution
Need for investment in technology and R&D
The report notes that premiumization, electrification, rising electronics content, and stronger safety requirements are creating new component pools.
Exports and localization are also expanding the market available to Indian suppliers.
However, this shift will require component makers to build capabilities beyond traditional manufacturing.
The report stresses the need for greater investment in technology, engineering, and research and development (R&D).